Once-sleazy time shares gain new respectability

March 07, 1993|By Mary McAleer Vizard | Mary McAleer Vizard,New York Times News Service

The concept of a time share vacation had never appealed to Sandy Bowman of Cincinnati. "Buying a studio for a specific two weeks at the same resort didn't seem that attractive," she said.

Like many vacationers, she had been pestered by hard-sells and even toured a few resorts. "But nothing persuaded us to buy," she said.

Last spring, when Ms. Bowman, her husband, Chuck, and son, Adam, now 11 years old, visited Disney World, in Orlando, Fla., they took a look at the Disney Vacation Club, the company's first time-share venture, started in December 1991.

"We heard it was a pleasant experience and no one would pressure us to buy," Ms. Bowman explained. When the Bowmans returned to Disney World the following August, they had decided to buy a time share there.

"We trusted the Disney name and liked the flexibility they offered," she said. Instead of selling specific weeks in perpetuity, Disney offers purchase points that the buyer can spend to create different kinds of vacations.

Each point costs $56.50 and the Bowmans bought 230, the minimum number allowed, which they can use for three weeks in a studio or one week in a one-bedroom house in the spring or summer. Or they can switch to a two-bedroom house in the fall.

They can even bank their points over to the next year and splurge on one week in a three-bedroom, four-bath villa.

This new flexibility, tied to the entrance of many high-profile companies, like Disney, Marriott, Westin and others, is giving the time-share industry a new respectability. In fact, some are predicting it will be the next wave in the vacation business.

"People who wouldn't have winked at time sharing before now have a comfort level with the big companies involved," said George Leposky, communications director for Interval International, a vacation exchange service for time-share buyers. And the luster is rubbing off on some of the lesser-known resorts as well."

Demographics also seem to be working in the industry's favor. There are indications that ownership of second homes will rise dramatically in the next 20 years as baby boomers reach the ages of 45 to 64, the group accounting for 48 percent of recreational property owners, according to American Demographics magazine.

"This increased demand for second homes should benefit time sharing, since many people don't have the money for a full-time second home," said Brad Edmonson, editor of American Demographics.

Typically, a week at a time-share resort costs an average of $9,500, according to the American Resorts Development Association, the trade group representing time shares. The term is usually 25 to 50 years, and there is an annual maintenance fee, which can range from $200 to over $1,000, depending on the resort.

"I can't afford my own condominium, especially the maintenance of one," said Chuck Giglio of Miami, who owns four time shares in Florida. "I like the fact that I can share my expenses with 51 other people."

Time sharing is really an infant industry in this country. Started in the French Alps, it was exported to the United States in the '70s.

"After initial growing pains, it's starting to be a mature industry now," said Bill McCreary, senior vice president of Westin Hotels and Resorts, which operates a time-share resort in Lake Buena Vista, Fla., bordering Orlando.

The industry has grown dramatically in the last decade. The American Resorts Development Association reports that more than 440,000 time-share weeks were sold in 1991, a 340 percent increase over 1980. The gross sales volume in 1991 was $3.7 billion (the latest figure available), a more than 650 percent increase over 1980.

The United States has 43.6 percent of the world total of time-share resorts and Americans account for 60 percent of all time-share owners.

In the industry's early years, abuses were rampant, from overselling of units, bait-and-switch tactics and outright embezzlement.

By the mid-'80s most states had begun regulating the selling of time shares, requiring the licensing of salespeople, the registration of developers, bonding for completion of improvements and an escape period for those who bought contracts.

"In almost all states, especially those with a lot of time shares, there are extensive protections for the consumer," said Stephany Madsen, vice president of state legislative affairs for the resort association. "The sleazy operators have long ago been put out of business."

"There's no question that the industry is better regulated now than it was in the early '80s," said Tom Bell, chief attorney with the Florida Department of Business Regulation. "But there are still problems of enforcement. So the consumer must still use his head."

Mr. Giglio has seen both sides of the situation. One of his time shares, in Key Largo, Fla., went bankrupt and another, in Marathon, Fla., fell into disrepair.

"The most important thing to watch out for is that the resort has good management and that it's well maintained," he said.

Mr. Giglio's most recent time-share purchase was at Disney. "With that kind of company, I figured that accountability is going to be to the dime," he said. "And I'm pretty sure they're not going to go bankrupt."

Disney has already completed 197 time share units at Orlando and is building 150 more. The company hopes to build a total of 500 units eventually.

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